The Japanese economy remains in a severe situation but starting to pick up, the Bank of Japan (BOJ) Governor Haruhiko Kuroda said in a statement on Thursday.  He also commented that “Will watch the impact of COVID-19 and take additional easing steps if needed without hesitation”, “Japan consumer prices likely to fall for the time being”, and “Consumer prices likely to turn positive thereafter, gradually accelerate pace of increase as economy improves”.

Japan’s August month’s Current Account balance grew past- ¥1983.7 B forecast to ¥2102.8 B. Also on the positive side is Trade Balance – BOP Basis that rose beyond ¥137.3 B previous readouts to ¥413.2 B.

It has to be noted that the news from Yomiuri suggests Japan will remove the travel ban for 12 countries including China from next month also added to the market-positive sentiment. On the other hand, the Fed minutes and recent comments from US central bank policymakers have been trying to negate any pessimism.

US President Donald Trump recently said he feels perfect and the coronavirus (COVID-19) vaccine will be out just after the November month’s election, due to the political problems. The Republican chief is also ready to consider the Democrats’ counterproposal, as per the White House Chief of Staff Mark Meadows, if House Speaker Nancy Pelosi respects the administration’s stand. However, market players are less convinced as there is very little time before the world’s largest economy head to the Presidential election.  “Obviously, they are hoping to delay the answer until after November 3rd. Must focus on speed, and saving lives!” Mr. Trump wrote, tagging FDA Commissioner Stephen Hahn in the tweet. The political drama has already taken a long time and is still failing to offer any stimulus, which in turn adds to the odds of opposing Trump’s upbeat sentiment.

Moving ahead, the US vice Presidential Debate, at 01:00 GMT, will be an immediate catalyst and is likely to offer another positive signal to the risk tone. After that Investors will keep an eye on Japan’s Eco Watchers Survey for September and the US Jobless Claims for further reactions.

USD/JPY 4 Hour Chart:

Support: 105.67 (S1), 105.38 (S2), 105.16 (S3).

Resistance: 106.18 (R1), 106.39 (R2), 106.68 (R3).

Amidst all the prevailing catalysts creating a cautious optimism for greenback against yen, we expect a bullish trend for USD/JPY.